Home and Away
- 08 June, 2005 14:47
Business knows no borders, and today's multinational CIOs must overcome cultural differences, the tyranny of distance and a host of other challenges to support their company's global business strategy successfully.
Sooner rather than later, foreigners doing business in Japan will come head to head with the concept of nemawashi, an informal process of quietly building consensus for some proposed change or project by first getting feedback and buy-in from all interested parties.
The nemawashi concept makes any Japanese business meeting radically different from anything most Australians are used to. Before a formal meeting starts, participants have already drawn conclusions about the ideas to be presented, and proponents have likely sought approval for proposed ideas or projects from every person of influence involved. It was a system developed to minimize argument and maintain harmony.
Tony Newman, general manager information systems with Mitsubishi Motors Australia, who has been travelling to Japan for 21 years in a variety of roles, says it is one he admires and is very comfortable with. Like other Aussie CIOs working for multinationals, Newman knows that how effective he can be as a CIO is largely determined by the amount of influence he can build among his global peers. Learning the head office culture is, he says, an excellent place to start.
"I like the Japanese culture and I guess I have grown quite accustomed to it. I think one learns to work perhaps in ways that many Australians find strange," Newman says.
"The concept of nemawashi refers to the idea that when you want to dig a tree out, you don't just go and dig around one day and chop it down. You go out and very gently dig around the roots of the tree and then rock it a little bit, then you go back a week later and you dig a bit more and rock it a little bit, till finally on the day that you want to dig the tree out you just lean on it and it rolls over. In my experience you don't confront the Japanese. You work with them and you slowly move them in your direction. Confrontation and raised voices aren't something that I think works in Japanese culture," he says.
In this sense nemawashi might be the perfect model for Aussie branch office CIOs wanting to build influence among their global peers, wherever head office might be. With ever-growing numbers of corporations extending their activities across national boundaries, global teams have become commonplace, typically focused on using technology to break down barriers but incidentally introducing a multiplicity of cultural and people challenges.
Many Aussie CIOs are now key members of global teams grappling with ways to align technology not only across business units but also across borders and cultures. They quickly learn that being a multinational CIO demands cultural sensitivity, a willingness to be available at all manner of odd hours and an excellent command of corporate strategy if they are ever to win influence, let alone local buy-in to global projects. Without that shift, global teams will find it almost impossible to work in concert to achieve their goals, Gartner fellow Marianne Broadbent says. In fact, Australian CIOs working for multinationals must master the organization's global strategy if they are to have any influence at all.
"If I am a CIO of an international company, and I'm the Asia-Pac person, I really need to understand the global shifts and moves of my company, and not be caught unawares of what those developments are. I need to make sure that I'm hooked into the company's formal and informal networks - especially the formal ones," Broadbent says. "That is really hard for the CIOs in those organizations because there may well be shifts in the business that they may not be as aware of because those shifts are not happening in this area.
"I think that's a challenge for local CIOs who have Asia-Pac responsibilities or are the Australian IT head of a larger organization. And in many commercial organizations, that is just the way that it is."
Like many other multinational CIOs, Charlie Sukkar, SAP director Asia-Pacific with Alcatel Australia, agrees being able to do his job effectively depends on his ability to understand both short-term and long-term global corporate strategy. Just recently there was a divestment of a global product line, and it was important that the Australian operation understand the move was a key strategy in order to align its own IT/IS strategy. "It's actually vital that we understand the strategy both short-term and longer term," he says.
Multinational CIOs must also overcome a range of practical difficulties including time and distance barriers, and then summon up the charisma needed to shift their organization from a local mind-set to a global one, and sometimes, the humility needed to take others' leads. That said, many of them say the rewards of working in multinationals, including the ability to share ideas and worries with peers without fear of giving away competitive secrets, and the chance to learn from CIOs in other regions, can be immense.
How much say the local CIO gets in a multinational IT set-up - or indeed whether there is even a local CIO - varies from organization to organization.
Ericsson Australia, for instance, has no formal CIO role, with much of the CIO work done at the Stockholm head office. Ericsson globally employees 60,000 people, with 2 percent of that number - just over 1000 people - employed in Australia and New Zealand. "On that basis we do have a team that is responsible for our IT facilities, and then the team that sits within our finance function, but we in the global organization have partnered with Hewlett-Packard to provide IT on a global basis and most of our desktop support, our application support, is performed by IBM," director of marketing and business development Tony Malligeorgos says.
The situation is vastly different for Sukkar. He is responsible for supporting eight other countries as well as Australia under a shared service office arrangement. And although the Alcatel head office is in Paris, his department reports into the regional head office in Shanghai. "We have a CIO based in Shanghai and we have also got a global CIO as well," he says. If headquarters sometimes forgets to tell Sukkar things he needs to know, or leaves it until the last minute, he is thankful that he has been able to react reasonably quickly. "I cannot think of a time when we were not told or we were told very late and it caused some massive inconvenience so far, but perhaps that is more good fortune than anything else."
There are plenty of other models Aussie CIOs in multinationals work to. For instance Fresenius Medical Care Asia-Pacific IT director Thomas Pinn says while Fresenius is headquartered in the US, he works much more closely with the regional head office in Frankfurt, Germany. "A very high percentage of our IT work - say 80 to 90 percent - is done in our own shop in Asia as the company is very decentralized," Pinn says. "But there are globally imposed standards that make a lot of sense and the company has recently set up a global IT steering committee to look at new technology."
By contrast Kerry Holling, IT country account manager for Hewlett-Packard, South Pacific, says HP has a corporate headquarters in the US where the CIO sits, then a regional management structure, with Australia and New Zealand (known as the South Pacific region) sitting in the Asia-Pacific region. "I don't actually have a direct relationship to the office of the CIO, because I need to collaborate with my colleagues at an Asia-Pacific level and they really have the linkages up to the corporate office," Holling says.
Standards, systems, policies and strategies are all set by HP's corporate CIO, and although CIOs at regional and country level have input into such decisions, their main job is to implement the decisions made by others. Sometimes that means being left out of the decision-making loop altogether, Holling says.
"To be honest I would prefer to have a more direct relationship with the corporate office, but that is just not the case in terms of how we are structured today," he says.
Overall, Holling says his communication links with the Asia-Pacific office are strong, with weekly two-hour management conference calls (unfortunately held on Friday afternoons, which does not always suit him all that well) keeping him pretty much in touch with what is going on. Even so, without the close relationships he has forged with some people at corporate headquarters, which provide some "back channel communication", he says there would be a constant danger that he would remain ignorant of important issues until some time down the track.
Although Holling goes to Singapore perhaps three times a year for a get-together of regional IT managers, HP no longer sees the need to stage global CIO events in the US. "It's a very costly exercise and it's really not something that's on the radar any more," Holling says. "It's a big trip to go to the US. I have formed some relationships and continue to foster communication via those channels as a consequence of those global meetings, but it has been a while since the last one so from that point of view those contacts tend to diminish over time."
Like Holling, Pinn does relatively little travel, primarily communicating with Frankfurt via video and teleconferencing. The downside is that those meetings are frequently in the middle of the Sydney night. Fresenius relies heavily on NetMeeting and stream sharing so that conference participants can view the same data and information.
Pinn knows well the feeling of being forgotten. He says in earlier years when the organization was growing and a corporate IT shop was setting standards, he did often feel he was left out in the cold and wished for more corporate support. As soon as he learned that he had to help himself by raising his profile and credibility to get anywhere, all that changed. "Now we are really working with the corporate IT organization in a way where I am sourcing more and more through them, because they are starting up in Asia. So a good relationship is developing," he says.
While conference calls serve Holling and Pinn for now, Ernst & Young Australia CIO Stephen Arnold still relies on physical travel to remain in contact with his peers, and he holds a firm belief in the value of regular face-to-face contact with his counterparts overseas. "Staying in touch in a global organization is something that you have to constantly work at," Arnold insists. "Attendance at formal meetings, which inevitably means travelling to Europe or the US, supplemented by late night conference calls, is the primary method. This is then supplemented by informal discussions with contacts via telephone, instant messaging and e-mail."
Arnold says establishing a personal relationship with key stakeholders is critical. Since distance and time zone differences can make this difficult for citizens of the Asia-Pacific, physically attending meetings helps build rapport. Without these close ties, he says, it can be all too easy for the local CIO to be ignored or overlooked when the big decisions are being made, or vital messages need to be conveyed.
"If the communication processes are working properly, surprises shouldn't happen. The biggest problem I think I have experienced is not being left out but just missing out on some of the less important but interesting details, or getting this additional information later," Arnold says.
For some Aussie CIOs, staying in touch with corporate head office is relatively easy. JPMorgan Chase, in the interests of achieving global standards and consistency, has been deliberately structured to ensure its global business strategy, including technology agendas, flows through the entire organization.
Liang Chen, head of global technology infrastructure, JPMorgan Australia, says regular CEO communication to employees, rich content on internal Web sites, constant global and regional town hall meetings, and regular visits by business leaders all provide continuous and effective communication. "Being part of the local management team, you are constantly engaged with the organization at regional and global levels. In addition, technology operations managers often have multiple reporting lines, one to the local management and another to the regional or global management, ensuring staff don't operate in isolation," Chen says.
The technology operating model of JPMorgan requires great teamwork. To drive an end-to-end service delivery agenda to the business in one country requires local resources to do the work, but also support services from other locations under the organization's hub/spoke model, Chen says. Global or regional product managers are also involved since so many local solutions are based on global tools and processes. Hence local CIOs are part of a regional management structure. Regular weekly conference calls, frequent cross-regional or global meetings and internal e-mails provide a good platform for people around the world to be connected and communicate.
"Achieving the level of networking needed to maximize the effectiveness of my job is a constant challenge," Chen says.
Things work a little differently at the AXA Group in the Asia-Pacific, a publicly-listed company where Wendy Thorpe is CIO. Thorpe has her own team and operates relatively independently, but also works closely with the 20-strong IT coordinating team in Paris, working under the global CIO. The global organization works very much as a federal system, she says.
The CIOs for each of the seven largest companies in the AXA group - including the Australian arm - together form what are known as the IS strategic and steering committees, which meet quarterly face-to-face - "You don't go, you don't get a vote," Thorpe says - to set the strategic IT direction.
"There are also a number of other global groups and teams that meet, which my direct reports go to," she says. "For example, there is an IT architecture board; there is a processes group; and they also combine peers from the various companies and get together to come up with proposals that come up to the strategic committee for discussion and endorsement."
It is an arrangement that works very well, Thorpe says, but only because the globally set standards are practical, sensible and limited.
"The companies are quite different businesses in different parts of the world. [They] are all in the financial protection and wealth management space, but for example, in Europe they have got property and casualty, while we don't do property and casualty here in this market.
"Therefore the systems of the businesses are quite different. So the standards that are set are around sensible things - for example interface systems such as general ledgers, e-commerce tools, those sorts of things. But in terms of applications, the regulations and the businesses are different so therefore I cannot see where it would be practical to have global systems or standards for other more business-related applications."
It is an arrangement, she says, that gives her considerable autonomy.
Face-to-face contact was a big part of Sukkar's year last year too, but much of that time was spent in fire-fighting mode. Forced to deal with considerable "trouble" at "the pointy end" of completion of Alcatel's deployment program of SAP across the region, Sukkar says he spent almost 40 percent of his time overseas. He also spent untold hours from his office in Australia on the telephone with counterparts in France, as well as in e-mail and other communication.
At least, Sukkar says, the French are now learning that there is a time zone difference and that Australia is on the other side of the planet. And he says he has, finally, managed to overcome the "not invented here" syndrome that used to seem as prevalent in France as in the US.
"One of my big frustrations when I first started at Alcatel was that the only good strategy came out of Paris, in that we really had to fight for our opinion, our vision, our strategies," he says. "I guess we needed to demonstrate that we were capable of coming up with a plan or a vision that was as strong as theirs."
So Sukkar started on a conscious and deliberate campaign to convince the French that the Australian arm was full of highly capable people with strong ideas about the way IS and IT should be managed and able to deliver results on a global scale. Fortunately, his efforts were helped by the fact that the regional deployment of SAP was highly successful at a time when the economic and business climate meant cost reduction was an absolute focus of the organization, and when the thinking in Europe favoured discrete implementations in each country, an approach which proved highly inefficient.
"I guess we were quite fortunate that we were able to sell our strategy based on it being not only the most economic model but a very cost-effective model," Sukkar says.
"I think we had to prove ourselves. We had to, from our point of view, stop talking and start doing. There was a period there when all we did was to have discussions -we had strategies and visions, but there was no execution. We had to take it to the next level, which was to define a program of work, and execute based on the program. We stopped talking and we started doing and we started getting results, and that is how we proved that we were capable of achieving or realizing our strategy.
"Now we have got the runs on the board and we are actually looked upon for comment and for opinion, whereas early on, four years ago, there would be no consideration of our view. They would just do things and we would need to follow," Sukkar says.
As a regional and regional-divisional CIO of the biggest division of Fresenius, and one who is basically running the IT shop for the company in Asia, Pinn has no reporting lines back to Germany, but is responsible for local implementation of global projects.
"It's really about if they want to introduce new technologies or we change the database of our systems," Pinn says. "We went from Informix to DB2, so that was a global communication process. When we set a new standard for a data warehousing solution, that was a global project. Then we had a global group looking at Internet content management, three years ago or something, but we selected an Australian product.
"So in that sense I think in most cases we are actually quite democratic in our process, and I can work with my vice president and my management team group in Asia," Pinn says.
And if Thorpe has ever been left out in the cold in decision making, it has never been on major issues. "People can sometimes just forget to put an e-mail together, but on the big issues, no, that hasn't happened. The relationships are pretty good, so if I feel that a wrong direction is being pursued I'm quite comfortable saying so and following it up."
If headquarters sometimes forgets to tell Sukkar things he needs to know, or leaves it until the last minute, he is thankful that he has been able to react reasonably quickly. "I cannot think of a time when we were not told or we were told very late and it caused some massive inconvenience so far, but perhaps that is more good fortune than anything else."
To be an effective manager, JPMorgan's Chen says, means managing 360-degree relationships at all times. Managing up is a major part of it. To have a good manager who understands and supports you plays a critical part of your success in your job.
"In my case, my managers are all located overseas. Therefore, there is a great need for me to provide them with good visibility regularly so they can help me to achieve the outcomes we are looking for," Chen says. "To a certain degree, I have been fortunate as I have very supportive managers."
He says the advantage of being in a global company is that you can leverage global capability when you need it at the country level. There are plenty of global solutions, processes and tools available to the Australian arm of JPMorgan when it provides solutions to the local business.
"We also benefit from global contracts with external vendors to achieve above-average savings. As I touched on previously, there is abundant information flow through the organization. In order to achieve a level of success for major initiatives, the firm spends a huge amount of time on communication to ensure everyone is on the same page," Chen says. "The firm's practice is to get you involved at an early stage to ensure these initiatives can be executed successfully in each local business environment."
Chen says that means he must at various times contribute, lead and follow. To be an effective leader you need to lead the team and contribute to any IT decisions made, he says. On the other hand, as part of a global organization, he also must follow the global guidelines and execute as needed. Making contributions at local and regional levels is key.
Whatever the stresses and strains, it seems for most Aussie CIOs working in multinationals, there are largely upsides to their working arrangements. "Countries around the world all have different challenges and the ability to share experiences and resources is a huge benefit," Ernst & Young's Arnold says.
Chen explains that after the merger with Bank One in the US, JPMorgan Chase now has more than 150,000 employees worldwide with up to 10,000 IT professionals. Due to the size of the organization and geographic footprint, the company provides broad career opportunities for staff across the world. "Staff can expand their careers into the business or different technology disciplines, as well as working in different parts of the world, all while staying in the same job," he says.
"As a part of people programs, JPMorgan also encourages staff to take overseas assignments from time to time to broaden their skills and develop their international experience within the organization. Many local technology staff have successfully moved offshore, some of which have taken on bigger responsibilities within the firm. On a personal front, I will be taking on a new regional role. This is a very exciting opportunity for me, managing technology operations for some critical businesses in Asia," Chen says.
Thorpe says one advantage of working in the global environment is the peer sharing, both formal and informal. She can discuss issues she is considering with seven other CIO peers around the world openly and confidentially, and get all the help she needs.
"There really is in that sort of multinational or global environment a lot of sharing and just that private confidentiality which you really appreciate. You don't have that locally. And I guess the other side of it is around the procurement side - when you're dealing with Microsoft or Oracle or the other large vendors at a global level obviously the leverage you've got is significantly greater and we can benefit from that here. When you're doing it on your own you don't have that," she says.
On the downside are what Thorpe calls "the hygiene factors". When she goes to head office meetings everyone else might be able to pop in for an hour, but it can take a week out of her working year by the time she factors in travelling time.
Holling, who has been a CIO for Digital Equipment, Compaq and now HP, admits he does sometimes envy CIOs in Australian-based companies for their ability to work with the business to identify and develop IT strategy. "Then again, you can look at it another way and say, well, actually it's not always a bad thing to have someone else doing all that hard work and making all those decisions," he says.
"I have a very good relationship with my counterparts in India, China and Japan, and as you can imagine there is a diversity of views among the four of us in terms of how we deal with some matters. But we do have a forum going where we discuss these things pretty frankly and openly before we take it to more senior management and put a position forward. I enjoy the cross-cultural dialogue that we have. Certainly people are coming from very different perspectives in some of those discussions, particularly a growth market like China - I mean their challenges are completely different from what we have in Australia where the market is pretty mature.
"I actually think if ever I went into a CIO role for an Australian-based company there is certainly so much that I could take into that role that I would be able to leverage from what corporate HP is doing. There's a lot of intellectual capital there really," Holling says.